Jumbo Loan Down Payment Requirements

A jumbo loan, also known as a non-conforming loan, portfolio loan or non-agency loan, is a mortgage loan exceeding the conforming loan limits set by Freddie Mac and Fannie Mae, which vary by county or home type. The conventional loan limit is currently $484,350 for most of the U.S. with the exception of some higher cost locations in California, Florida and the North East. Some of these high costs locations have loan amount caps above $726,525. Please click here for the complete list of 2019 Conforming Loan Limits

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Jumbo loan options have evolved in recent years, as of 2019 qualified buyers have financing options up to 95% loan to value. Depending on the property state, 5% down options can be accomplished by doing a single 95% loan, or a “piggyback combo” 1st and 2nd mortgage. Both options allow borrowers to avoid paying monthly mortgage insurance(PMI) However, there are a few pros and cons with each.

90% & 95% “Single” Jumbo Loan:

Simple one loan process with reduced closing costs and paperwork since there is only one loan being processed. However, the interest rates can be higher on the single loan option. What financing options are available, and make the most financial sense will depend greatly on home buyers credit, property state, and loan amount.

80-10 & 80-15 PiggyBack Combo Loan:

Another option to consider is a conforming loan with a “piggyback second” loan to bridge the gap between the conforming and non-conforming amounts. In some cases, a homeowner can get a more affordable mortgage payment by taking out two loans simultaneously. One loan up to the maximum conforming limit (generally $484,350) and a second “piggyback” for the remaining balance. The second piggyback loan may have a higher interest rate and the overall closing costs can be slightly higher since there are two loans to process. However, in many cases, this option can be cheaper in the long-run than a straight single jumbo loan. One example of a 95% combo loan structure: John would like 95% financing on a $700,000 home in Phoenix Arizona. John’s first mortgage would be $484,350 (the max conforming loan limit in Maricopa County) The second mortgage would be for $180,650. The remaining 5% would be John’s down payment of $35,000.

2019 Jumbo Loan Requirements:

Credit – Good credit is required, which should be at a minimum of 700 or higher for the 5% down payment option. Buyers with 10% down payment must have a credit score above 660.

Payment Reserves – Jumbo loan programs may require you to have a certain amount of payment reserves – the amount of assets you have available after your mortgage has closed and you have paid for your down payment and closing costs. As a general rule, one month of reserves should equal one mortgage payment, includes taxes, insurance, and any homeowners assessments. Jumbo loan reserve requirements may vary from 3 months of reserves to 12 + months of reserves depending on how high the loan amount is, in addition to the applicant’s credit profile.

Documentation – Borrowers will need to document all income and assets in order to qualify for the Jumbo programs above. This includes (2) years of tax returns and/or W’2, plus bank statements to demonstrate sufficient assets.

Property Use – The programs above only apply to primary residence and vacation homes. Financing is available for investor properties but generally requires an addition 15% down payment.

Property Type – Subject property must be a single-family home, townhome or approved condo. Vacant land, acreage, manufactured, commercial, building on your own lot (construction to perm) financing not permitted under this program. Please read the details about special construction financing here. This does not include a new construction home that is being built, initially financed and sold to you by a new home builder.

Jumbo Loan Amount Limits – 95% financing limit is capped at $2,000,000 loan amount. 90% financing is capped to $3,000,000. Borrowers with 20% down payment have options well over $3,000,000, please contact us below for details.

Loan Terms – The Jumbo programs above are available in a variety of fixed and adjustable rate terms. Adjustable rate mortgages often offer more attractive rates compared to jumbo fixed rate programs, making it one of the most common jumbo loan types.

Mortgage Insurance – Whether it’s a single or combo loan, nearly all the Jumbo financing options do not require monthly mortgage insurance, or more commonly known as “PMI”

Eligible military veterans do have high balance VA Jumbo loan options available to them. Please read more about VA jumbo mortgages here.

All the options above apply to both Jumbo purchase and rate-term refinance options. Lower LTV cash-out refinance programs are also available to qualified homeowners. Learn more about the latest Jumbo Loan requirements here.

Contact us today by calling Ph: 800-871-2636 or just submit the Request Contact form above for quick service 7 days a week. Our goal is to respond to all inquiries within 10 minutes during regular business hours.

25% for any amount that exceeds the base VA mortgage limit for your county. If the VA loan limit in your county is $424,100 (like most the U.S.) and you purchase a $500,000 home for example, you would need to put down 25% of the $75,900 difference. In this case $18,975 for the down payment. Please see the Loan Programs tab above to learn more about VA Jumbo loans.

I live in San Diego and need a jumbo loan at 5% down. 690 credit score. $800-950k purchase price. Income is sufficient for monthly payments, so down payment is the challenge. Do you have an option that would fit our needs?

I currently have a construction loan on a house for appx. 650k. What I would like to know is can I shop outside my current bank for a permanent Jumbo loan with 5-10% down payment? I have mid 700’s credit score and we are looking for something of this nature. Thanks

Whether you have Jumbo options at 5% or 10% down depends on some important factors like – Is the house now completed and being occupied? Is the property a primary residence? Is the land part of the loan? A few questions will need to be answered, reach out to us to speak with a specialist in detail.

Depending on exact credit and other qualifying parameters, you should have a few options with only 5% or 10% down payment at that purchase price. Feel free to submit the Request Contact form above to discuss in detail with a loan specialist.

Looking to purchase a home in Los Angeles County with a purchase price around $850,000. I have a mid score of 680 and an income of approx. $240,000 annually. Can I get approved for a 5 or 10% down mortgage and what would the estimated payments and closing costs be?

Thank you for your question. Credit along with other factors like assets play an important role in qualifying. 5% down could very well be an option. To review your situation, please submit the Request Contact form at the top of the page, a specialist can dig in a little more provide options.

Have a 700 FICO and looking at a 899K home in Virginia. Would like a jumbo loan for 5% down. What are the DTI requirements? If I have an existing home that I am planning to sell, does that mortgage count in my DTI?

5% down options are available to qualified buyers up to $1.5mil. As for your current home, yes the debt would be included (principal, taxes, insurance) in your debt to income ratio calculation until sold/closed. Just the same as any other mortgage type.

The reserve requirements only apply at the time of closing and they are not held or retained in any way, just verified by the underwriter. In addition, the reserves can be non-liquid accounts like 401k, IRA, etc. What happens after closing, equity level, etc, is irrelevant. Please submit the Request Contact form above to speak with a specialist.